China stocks set for biggest gain in a month

Shanghai - Chinese stocks rallied the most in a month as stake purchases by China Evergrande Group fueled optimism that the pace of merger activity in the property industry will accelerate.

The Shanghai Composite Index climbed 1.4% at 08:52, with almost all the gains coming after the midday break. The benchmark gauge of real estate companies surged 4.8%, poised for the biggest advance since March, as Langfang Development and China Vanke, both targets of billionaire Hui Ka Yan’s Evergrande, jumped by the daily 10% limit.

Evergrande, which boosted its stake in Langfang to 15% in the past four months, plans to further increase its holdings and doesn’t exclude the possibility of obtaining actual control of the firm, Langfang said Wednesday. Evergrande bought a 5% stake in Vanke, the nation’s largest residential developer, earlier this month.

“The whole property sector is rising as investors are speculating that other companies in the sector will also become the takeover targets following the cases of Vanke and Langfang," said Wu Kan, a fund manager at JK Life Insurance in Shanghai.